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What Is ESG Benchmarking?

For commercial real estate owners, benchmarking buildings’ ESG (environmental social governance) performance is a crucial step toward turning significant data into actionable information.

There are many ways that commercial real estate owners can contribute to a more sustainable world, abide by industry standards, and follow government regulations to save energy. 

What is ESG?

In general, ESG criteria are standards set for nonfinancial information related to a company’s environmental impact, social policies, and governance structures that stakeholders such as investors and lenders use to screen investments. 

Commercial real estate companies aiming to improve their environmental performance, for example, will often put out carbon or sustainability reports, limit the usage of harmful pollutants as well as chemicals, apply measures to lower greenhouse gas emissions, and use renewable energy resources.

Complying with ESG standards can raise companies’ ESG scores with respect to industry-leading benchmarks like GRESB and CDP, and thereby pave the way for more business opportunities and better access to capital. 

Related: Introducing The Real Estate Professional’s Guide To Getting Started With ESG

What Is Benchmarking?

In essence, ESG benchmarks provide a way to systematically evaluate the performance of certifications, voluntary standards, companies, or other entities. The goal is to better understand a building’s performance, implement various sustainability measures, or to work towards reducing environmental impact. 

For commercial building owners, the first step towards implementing an energy-saving process is to establish a baseline and benchmark your building’s performance so you can understand its performance in relation to buildings with similar attributes such as size, location, and asset type (i.e. residential, office building, retail, etc). 

Many real estate companies choose GRESB (formerly the Global Real Estate Sustainability Benchmark) to benchmark their ESG performance against their peers so they can disclose this ranking to investors and other stakeholders.

In 2020 GRESB assessed more than 1,200 real estate entities representing $4.8 trillion in gross assets under management (AUM) around the world in 2020. More than 100 investors—many of the world’s largest pension funds and investment managers—use GRESB data and analytics in their business decisions, showing the value they see in this benchmark.

Related: Measurabl Users Increase their Scores on the 2020 GRESB Assessment

What is the ENERGY STAR Portfolio Manager?

The ENERGY STAR Portfolio Manager is a tool for benchmarking commercial buildings in the United States and Canada. Created by the U.S. Environmental Protection Agency (EPA), ENERGY STAR is a program that provides information on the energy consumption of products and devices using different standardized methods.

ENERGY STAR Portfolio Manager is an interactive resource that tracks your building’s energy use. Portfolio Manager can be used to compare a building’s energy usage to that of the national median, yearly baseline, or similar commercial buildings. Approximately  25% of commercial buildings in the country utilize the tool to benchmark their energy consumption.

All you need to start measuring or benchmarking your commercial building’s energy usage is your utility bill and some basic information. 

Related: Measurabl Earns 2021 ENERGY STAR Partner of the Year 

How To Start Saving Energy in Your Building Now

Benchmarking your buildings can help you begin improving your ESG performance in a number of ways. 

●  Awareness. Once a building’s performance becomes measurable, you can focus on implementing and proving the effectiveness of energy-saving upgrades like solar panels, smart windows, and more. The ability to compare that progress against other buildings also provides a perspective of the challenges that may come.

●  Identification. ESG ratings provide clarity on how to be more energy-efficient. The key is to work together with the varying stakeholders to accomplish what’s necessary to align with ESG standards. 

  • Improve return on investment. Know your tools, know how to take advantage of them, and get a good ROI.

●  Tracking. With tools such as the Portfolio Manager, you can better track your results to ensure that your execution is bearing fruit and if not, you can make adjustments accordingly.

●  Transparency. Share your reports to the benefit of others and also earn recognition for your efforts.

●  Opportunity. Benchmarking is available for more than just energy; water usage and greenhouse gas emissions are also trackable. 

Ready to learn more and find ways to improve your ESG performance? Contact Measurabl today.